1.The following financial statement information is available for Jones Corporati

Question

1.The following financial statement information is available for Jones Corporation: 2012 Net sales $697,000 Cost of goods sold 377,000 Net Income 80,000 Tax expense 29,000 Interest expense 14,000. 2013 Net sales $784,000 Cost of goods sold 406,000 Net Income 112,000 Tax expense 48,000 Interest expense 14,000. The profit margin ratio for 2013 is : A. 14.3% B. 16.1% C. 48.2% D. 11.7% /////////// /// 2. Goin Company reports the following amounts for 2013 : Net Income $150,000 Average stockholders' equity 2,000,000 Preferred dividends 48,000 Par value preferred stock 200,000 The 2013 rate of return on common stockholders' equity is : A. 5.1% B. 5.7% C. 7.5% D. 8.3% /////////////// 3. Reynolds Company has income before taxes of $360,000 and an extraordinary loss of $80,000. If the income tax rate is 30% on all items, the income statement should show income before irregular items and an extraordinary loss, respectively, of: A. 360,000 and ($80,000) B. $252,000 and ($24,000) C. $252,000 and ($56,000) D. $108,000 and ($24,000)////////////// 4. Alpha's Bunny Bam has experienced a $60,000 loss due to tornado damage to its inventory. Tornados have never before occurred in this area. Assuming that the company's tax rate is 30%, what amount will be reported for this loss on the income statement? A. $60,000 B. $42,000 C. $18,000 D.$ 54,000

Explanation / Answer

1. C 48.2% 2. A 5.1% 3. A 4. A

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